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follow me on twitter. and "power lunch" begins right now. >> "halftime" is over. >> "power lunch" and the second half of the trading day starts right now. >> an unhedged hour of "power lunch." an hour filled with breaking news. in 30 minutes time we expect president obama to name jacob lew to replace timothy geithner. it the white house really getting serious on gun control? under way right now, vice president biden, at the chair's seat. we should have answered very soon. and new rules on mortgages. being announced today. we will highlight changes and explain how they could affect you. first though, sue at the new york stock exchange. sue? >> ty, as you mentioned, president obama will announce jack lew as his nominee for

secretary of treasurer. he staffers believe it will be approved. analyst say the president's pick is a sign he will move forward with planned economic reforms and do so aggressively. mr. lew served as coo of nyu and worked at citigroup and served as white house office of management and budget chief and is currently white house chief of staff. apparently job one will be to work with congress to raise the borrowing limit and prevent default that could come as soon as next month. the announcement is at 1:30 p.m. eastern time. stay with "power lunch." we will take you inside the white house for all the details. ty, back to you. >> very interesting. now, of course, another major event at the wlohite house. taking place right now. vice president biden's task force making a change in the way americans buy, sell and potentially use firearms.

eamon javers live at the white house. eamon? >> there are some that biden himself might not participate in. we just heard from the vice prest as he emerged from his first meeting of the day and he gives us a sense of how fast this process is moving along. >> there is no conclusion that i've reached and with my colleagues, i'm putting together a series of recommendations for the president that he will take a look at and a very tight window to do this. i committed to him i would have his recommendations to him by tuesday. >> a couple of other groups invited to the white house complex. including retailers. the biggest on that list wal-mart. but also look at others who will be here, including air cad my sports and outdoors. bass pro shops, cabela's, dick's sporting goods, and gander mountain.

other sm of the folks there, brandon entertainment llc. cam cost corporation, a parent of this network. motion picture association of america and a few others there as well to talk about violence in the culture. so tyler, clearly, a very busy day here and those folks don't have a whole lot of time to get their message through to the administration. because you as you heard the vice president say, he will give his recommendations to the president on tuesday, tyler? >> eamon javers, two questiones. where, if at all, does mental health figure into the discussions. and secondly, there were some reports that had been circulating in recent days that the president might do something unilaterally that would not necessarily involve legislation involving congress. >> right. >> on mental health, we just don't know where the vice president will come down on that one. but we do know that vice president said that universal background checks are a key element of all of this. tyler? >> thank you very much, eamon javers, we appreciate it.

sue, down to you. >> breaking news in the bond market. we have another bond auction up for grabs. and rick santelli is tracking action at cme. this is 30-year today, ricky, how did it go? >> first of all, i love 30 dpsh year options. furtherest down the curve. this is an a minus best of the bunch. best of breed this week for 66 billion. let's go through the metrics. ultimate yield is 3.07. wi mark set 309 bid offer at 308, split the difference, 3.08 and three quarters. 3.07 were priced lower yield. higher price sought after. if you look at the bid, we are above the average at 2.77. indirects above average app 37.8 and directs at 16.7 doesn't show the intensity of some of the direct bidding and all maturities over the last month but still beats 15%. ten auction average, solid auction, maybe a bit of the down

tick pushing yields up. whatever it is, every auction should have demand as good as this one. back to you, sue or ty -- tyler, it is all yours. >> rick, thank you very much. herbalife stepping up. last month a few big funds jumped in on the other side of the trade since ackman's presentation. since then, the stock is actually up by 5%. interesting course for the stock today. which i'm sure we will hear about. herbalife's ceo michael johnson defending the company in front of analyst today in new york and kelly spoke with him very interestingly on cnbc one hour ago. kate? >> tyler, thanks so much. very interesting morning here in terms of herbalife's defense in charges against bill ackman. among other things they are a pyramid scheme. they spent about two hours speaking to investors. as well as take something q and

a afterwards. i just want to give you the highlight of the latter part of the presentation, which is bring flg a consult front northwestern university who defended the pyramid scheme allegations in particular. she talked about a lot of people getting into herbalife sales because they want to get into the product themselves. they want it receive a discount. this self consumption as they call it is perfectly legitimate. she also talked about the notion of inventory loading, which is to say the distributors, who also buy the product themselves, will buy extra product because they intend to sell it to customers in the future. that might distort the sense of sales. they are future sales, not real ones. she said this does not go on. these are two examples of their defense. moreover, i talked to michael johnson about an assertion he made on our air december 19th be, the day the ackman short was first revealed by us. he said that day that 90% of

sales occurred outside of herbalife's traditional distribution network. today he backed off of that calling it a misstatement. here is what he told us, that he doesn't know very much about the statistics on this. let's take a listen. >> we know who we sell to. we do not know who they sell to. and there's nothing wrong with the way we do our business. there is absolutely nothing wrong with it. >> obviously tyler, he denies there are pyramid scheme. i asked him further about what is at the heart of your company. he said product. i pushed him further. is it sales, royalties, but that is the central tenant after pyramid scheme that the distribution element is more important than the sales. and he said, tyler, sales. sales are the only way you get paid at herbalife. the only way can you make earnings as a distributor. >> interesting conversation. can you see it on cnbc. thank you very much. you can also check out on cnbc.com, cnbc investigations

inc., selling of the american dream. herb greenburg's full report on multilevel marketing an herbalife, including the full documentary and complete mix of stories. find it on-line at selling the dream.cnbc.com. sue? >> ty, they aren't selling today on markets. let's look at how things are shaping up. dow jones is up about 40 points or so. and the nasdaq has been in positive territory as well. right now we have the dow up about 40. nasdaq is up one point. so skimming the unchanged line and saip s&p 5 lun is up about 5 2/3. we are heading closer to the heart of the earnings season. >> and only about 5 spers reported but that is not stopping us from making observations. i just got off the phone of the head of research. he is a long time earnings watcher. he is encouraged so far.

it is only about 25 of the 500 at the s&p. oracle for example, put them up there for me. all of them have reported their numbers and they were pretty encouraging so far. here is what i like, sue, the good news. number one, put that screen up there. record profits and likely the third quarter will be the trough for earnings. here is the bad news. no top line growth. still, how long have we been waiting for this. i think the fiscal cliff did have the -- and i want this answered. are ceos showing signs they will spend more. they are sitting on a mountain of cash. do they increase capital expenditures now that some part of the fiscal cliff is still involved? >> the other issue is that some companies have guided lower and lowered expectations. so my question is whether or not you can actually call these a win if indeed -- well, that's what you are hearing back here,

you know. >> sue and i have been doing this for 20 years. this has been going on since the dawn of time. you lowered the numbers going into it and -- an analysts are complicit with you doing that. then you beat by a few percentage points. for example,% gains in s&p 500 in the beginning of october for the fourth quarter. now down to 3%. and likely beat by about three points. usually three more percentage points. we know this is a very old game at this point. >> we just want to put it out there so everybody knows what is going on. thanks. see you later. ty, back to you. >> sue, thank you. average rates on fixed mortgages rising last week to 3.4%. still, though, near record lows. this has major new rules coming into the picture regarding mortgages under the usa. diana is live with details in washington. diana? >> reporter: that's right, tyler. lenders are now required to insure that a borrower can pay off their loan. and the rules announced today

are really just a roadmap to that end. they go into effect next year. take a look. lenders must now check everything. no more low doc or no doc loans. there is no excess upfront points and feees. that is capped at 3% of the loan. that includes those to compensate loan officers and brokers. no toxic loan features such as terms over 30 years. interest only loans. negative amor toization payment where the interest goes up. there a cap on how much a borrowers gross income can go to debt. 43%. that's the limit. mortgage and related charges like insurance and taxes. plus your debt payments like credit cards, car loans and student loans. there is a temporary exception to that last one for certain borrows that pass fanny, freddy or hfhahfha underwriting.

>> now to jane for more. >> tyler, it may be a miracle. governor brown is releasing his budget for the upcoming year. he is saying for the first time since the recession, california faces no budget deficit. his new spending plan calls for small increases in education to fund a budget of $97.7 billion. even though he expects it to cost the state in the coming year. he has suggestions in how they can do that. i'm not quite sure how he says it face knows budget deficit. because according to the latest numbers, ty, from the controller's office, which came out last week, california, as of december 31st, had a cash deficit totaling $24.2 billion, which was cover bed borrowing.

. so the controller said the debt is 24.2 billion. the governor says no deficit for the first time since the recession. >> is this his budget for fiscal year? excuse me, jane. is this his budget for fiscal year 2013? and when does that start? does it start july 1? >> starts july 1st, yes. he is now presenting his budget starting july 1. >> jane, i tell you, i'm stunned. >> yeah. >> it doesn't make any sense given the numbers you've been following so closely for the past few years. i'm anxious to see how they did it. are you as surprised as i am? >> i am anxious too. and thrilled if it's true. you know, the votes of california did pass an income tax hike for the higher end, which at the very high end goes up to 13.3%. also sales tax hike which is retroactive to january 1st of a

this year. but we will have to see if that's enough to erase what the controller says is $24 billion deficit. >> maybe i know you're going to reach out to controllers, so it is interesting to see what he says and whether those numbers gel. listen, let's hope it's the case. it is a huge economic stake for the country. if they can erase that budget deficit, good for them. we will find out. keep following the story here on "power lunch." welcome news for ford shareholders. the auto maker is doubling its quarterly dividend to 10 cents a share. highest in seven years. reflecting strong sales and healthy balance sheet. first quarter payout will cost the company about $370 million. shares of ford are up on the day by almost 2.5%. last trade is $13.80. while ford shares are jumping, one high-end retailer is taking it on the chin on the back of its latest sales figures. well talk about that, plus why investors are dialling into a

beaten down telecom stock. it is up double digits right now. having its best day under more than a decade. we will tell you when it is when tyler and i return on "power lunch." at 1:45, the aflac duck was brought in with multiple lacerations to the wing and a fractured beak. surgery was successful, but he will be in a cast until it is fully healed, possibly several months. so, if the duck isn't able to work, how will he pay for his living expenses? aflac. like his rent and car payments? aflac. what about gas and groceries? aflac. cell phone? aflac, but i doubt he'll be using his phone for quite a while cause like i said, he has a fractured beak. [ male announcer ] send the aflac duck a get-well card at getwellduck.com. i am probably going to the gas station about once a month. last time i was at a gas station was about...i would say... two months ago. i very rarely put gas in my chevy volt. i go to the gas station such a small amount that i forget how to put gas in my car.

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president obama getting ready to name his choice for treasury secretary. we will hit it live in about 15 minutes. and see why some are so concerned about the choice and it has nothing to do with his

squigly signature, sue. >> indeed, it does not, ty. it has been a tough day for shareholders right now down at $60.50. after holiday sales came in at the low end of expectations. it was $992 plilon worldwide. u.s. same store sales were the weakest dropping 2% p european sales were flat. asia was a bright spot with comparable sales increasing 7%. tiffany now saying its annual earnings will come in at the low end of its previous guidance and the street is punishing it for that today, ty. >> thank pup teen retailers, reporting holiday sales figures and here is how they are tried trading right now. here is a look .

courtney reagan is on the retail beat. court? >> as with teens, the stocks can be a little fickle. three releasing holiday results today. each tell a different story. the teen retailer lowering its quarterly guidance. competitor american eagle reports sales improving by 5%, including on-line business but excludeing e-commerce. the retailer reiterating its quarterly earnings forecast all the same. as silver lining, robert hanssen notes business accelerated post christmas and seeing good response to sprint merchandise. shares of urban outfitters trading at all-time highs as sales including on-line increased 9% for the holidays. so brick and mortar comp sales decrease 1%. it does remain a favorite. >> court flee, thank you very much. appreciate it. sue, down to you. >> thank you very much, ty. it is a pretty exciting day here

at cnbc. tune in to us at 1:00 p.m. tyler and myself of course, but we can be in your bedroom much se sooner apparently. take a loosen. i'm sue when herrera. thanks for letting c fl nbc be wake up call. >> hi, this is cnbc's tyler mathisen. how will you play your day today? no matter what you do, make it a great one. >> an alarm clock app we think you should get it. download it. i can see people saying all around the country, honey, nothing against you, i just want it wake up with sue herera. well, well, well. >> there you go, ladies and gentlemen. >> we have about ten versions of that. there are a lot of different

things can you download. >> oh, yes, lots of versions you will never hear. >> that's true. there are. >> get the cnbc app, everybody. all in good fun. you will enjoy it. >> is fun, actually. we add good time doing it. i think i'm plushing. anyway, winner is, oscar nominationes. there were two clear winners. we will have it for you when we return. >> 2012 nominees for best performance by an actress. what? nothing. are you stealing our daughter's school supplies and taking them to work? no, i was just looking for my stapler and my... this thing. i save money by using fedex ground and buy my own supplies. that's a great idea. i'm going to go... we got clients in today. [ male announcer ] save on ground shipping at fedex office. [ male announcer ] save on ground shipping we replaced people with a machine.r, what?

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steve ep spielburg's "lincoln" leads the oscar race. fox's life of pi, right behind. it got 11 nods. $329 million at the box office. silver linings play book and les miserable from universal studios, part of the comcast family. ticket sales of 147 million respectively. rounding out the top five, argo, warner brothers film, directed by ben affleck. who i don't believe got a nomination. a box office haul of $176 million. here is how studios are training. news corps up a little bit. comcast basically flat and time warner the same up -- well, it is unchanged right now, sue? >> ty, thank you. let's recap other headlines driving today's session.

nokia on strong surge sales. the company did warn that competitive environment though remains challenging. molly corp plummeting after 2013 revenue and case flows would be weaker than expected due to falling rare earth prices. and super value, which has been in the news lately, says it plans to sell five retail grocery clans to an investor group. the price tag, $3.3 billion. as we continue on power lunch we are waiting for president obama to set to name the white house chief of staff jack lew as new treasury chief. but there are a number of people, including some on the floor, who are afraid of mr. lew, heading up treasury. we will talk about that when we come back as you look at this live picture from the white house. i've always had to keep my eye on her... but, i didn't always watch out for myself. with so much noise about health care... i tuned it all out. with unitedhealthcare, i get information that matters...

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break news wbt president is getting ready to speak. he is expect said to nominate white house chief of staff, jack lew, to be his next treasury secretary.

outgoing treasury secretary tim geithner should be there also. >> spearing tough fiscal fights with congress and his choice is raising questions about how independent the new treasury chief will be from the white house. steve liesman taking a close are look at this. steve, how independent are they and when they get too independent as paul o'neill did, they get fired. >> very good point. one is how much independence they exercise in office but the other is the chief criticism of jack lew so far is how much independence he brings to the job before he takes the office. the issue is when you think about the past seven treasury secretaries they've all come to the office in their resume with a bit of intendens, which leads you to something other than politics at the white house. let's go through it now. lloyd benson back in 1939 appointed by clinton, he was politically right of center of president clinton. that was the one thing. robert rubin came from goldman

sac sachs. it was something other than political. larry summers, appointed by clinton an academic economist. how about the past three in john snow, if you look at him, there he is right here, came from csx corporation. henri paulson again from goldman sachs. coming over here, geithner came from the new york fed. why is this important? he will be an advocate for the white house. they have other responsibilities. collecting taxes. irs report is up to them. issuing the debt. other things that treasury secretary has to have some form of independence. also, tyler, think about it being a loss for the white house itself. not having somebody with credentials that the market can latch on to, to advocate policies.

here are credentials of jack lew in the screen we call, you don't know jack. you can see very much political. look at the next bit. twice serving as budget director and most recently as chief of staff. unless you count the preef time he spent at citigroup as being that piece of independence or new york university. it is not the kind of thing tyler that market will say, you know what? he is one of us. that raises questions about the policy and also we talked about is he is the guy who will be in the chair standing up for the financial -- for the next financial met down. >> a long policy insideer. steve, stay with us, as we bring in our panel. joining us is john harwood with the political fall out and with the markets, bob pisani. i guess people criticized mr. lew for saying, how is he in a crisis? i guess you never know until you are in one and the one thing you could say, you can't fail to say about mr. lew, is that if anybody aught to be able to get through the federal budget, and understand it, it would be he.

based on his two stint at omb. >> exactly. and i think it is pretty hard to say that he is not prepared for a crisis if he served as white house chief of staff in a senior position at state department also as budget director. he has been around at a high level for a long time. of course he hasn't been in treasury secretary job and we all remember that hillary clinton, jack lew's old boss at the state department, said, what is barack obama going to do with a 3:00 a.m. phone call? and barack obama has been counting and did count in the 2012 election on his record answering that question and jack lew will ultimate sli to do the same thing. >> you know what, bob pisani, i'm hearing that everybody seems to forget right now, that europe is still a mess. we still have issues with europe and if the financial system in europe blows up, jack lew will have to have the confidence of the u.s. and the world financial markets in order to insulate the united states in case something like that happens. and a lot of people down the

here are not sure because he doesn't have the market's experience that a timothy geithner has. >> that's a major problem. remember, he will have to negotiate with china and with the world bank. he will have high level discussions and finish dodd-frank and finish the baz el three. those are all really important issues. and his lack of experience is an issue down here. i know people that would have, for example, supported robert. he is a wall street guy and would have faced as much opposition. >> john, is there anybody who could be nominated that wouldn't become a political fight. that this will be ultimately an ideological fight. >> any nominee gets a fight given how polarized our country is, ideological and partisan lines and jack lew will get some resistance based on the fact he doesn't have the wall street experience, business experience, based on the fact that some republicans didn't like being on

the other side of the negotiating table with him during budget fights. but this is somebody whose ego is not out front. he is very low key. somebody that is going to be calm. this is part of the answer to what he o would do in a crisis. and i think jack lew will get through confirmation process for that reason. >> we will take a quick break. announcement is expected right after a break and we will bring it to you live. the president will take to the podium in just a few minutes. we're back in a moment. ! [ garth ] thor's small business earns double miles on every purchase, every day! ahh, the new fabrics. put it on my spark card. ow. [ garth ] why settle for less? the spiked heels are working. wait! [ garth ] great businesses deserve great rewards. [ male announcer ] the spark business card from capital one. choose unlimited rewards with double miles or 2% cash back on every purchase, every day! what's in your wallet? [ cheers and applause ] [ male announcer ] how do you turn an entrepreneur's dream... ♪

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last time i was at a gas station was about...i would say... two months ago. i very rarely put gas in my chevy volt. i go to the gas station such a small amount that i forget how to put gas in my car. [ male announcer ] and it's not just these owners giving the volt high praise. volt received the j.d. power and associates appeal award two years in a row. ♪ and welcome back, as we await the presumed nomination of jack lew to proceed timothy geithner as treasury secretary. who might replace jack lew as chief of staff at white house? >> there is. two main candidates talked about. one is ron claim, former chief of staff to vice president biden. he also served in the clinton

administration. very experienced washington hand. but the lead candidate, i'm told is dennis mcdona. long time obama aid. he would fit the practice, the pattern that president established of picking people close to him for key jobs. like jack lew, he is a no-drama figure. somebody whose ego is not out front. he gets along with others. >> at one time he broke with that pattern i suspect when he went with bill daly, not a chicagoan but not part of that inner circle here. >> just thei issue of independence. if jack lew were able to deliver fiscal sanity. if you ask guys in the market, what is one thing they want from the market, first order they want to away from the brinksmanship toward the level of sanity. corporate tax reform. and i guess i want to throw out

to the group here, does the appointment of jack lew make more likely less likely or have no impact at all on the possibility that we get a little fiscal sanity from washington? because to my measure, that's the real thing that matters to the market. >> i think it is. >> i would say not much impact to the extent there is any. it would be because he's got very long experience with budget issue. he knows them inside and out. he knows where you can cut and from a democratic perspective where you can't. but i'm not sure that that would be all that different if somebody else was in the budget director's job. this is president obama setting these priority. the democratic caucus is going to be the same no matter who is treasury secretary. >> there is also, john, advicive -- is there an advice role that treasury secretary played? certainly geithner played that role as an economic adviser to the president. >> right. exactly. >> no question. >> steve, one thing, what do we know of jack lew's relationship

with wall street? with the big banks on the street? with, you know, the financial titans that he may have to muster and bring together, if in case we do have another financial crisis? i agree with you, if he can bring fiscal sanity, everybody that i've talked to would be thrilled. and it would take a lot of volatility out of the market but what they are worried about is lack of relationship that timothy geithner had and apparently mr. lew didn't. >> he was their regulator. co-call these guys up on first-name basis. we know jack lew had contact with these people on a fairly regular basis but not the relationship geithner had or that paulson had. >> geithner, as you said, could call them up. he could also call them in. >> as what paulson did and geithner. >> i could say for sure, steve, that they don't know, jack lew don't here at all. >> they don't know him at all.

>> i love your full screen this morning on that. but if he could make a quick deal, on the debt ceiling and on the sequester, that would be enough. he would establish his bona fides very quickly with wall street if something positive could happen relatively soon on that front. >> let me just establish here, i'm not sure abraham lincoln could make a quick deal on the debt ceiling. >> on that note, here is the president. >> good afternoon, everybody. please have a seat. a little more than four years ago, i stood with mr. tim geithner and announced him as my first nominee to my cabinet. we were barely two months into the financial crisis. the stock marketed cratered. the housing marketed cratered as well. bank after bank was on the verge of collapse. and worst of all, more than 800,000 americans would lose their jobs in just that month. and the bottom was not yet in sight.

so i couldn't blame tim when he tried to tell me he wasn't the right guy for the job. but i knew that tim's extensive experience with economic policy made him imminently qualified. and i also knew he could hit the ground running. as chairman of the new york federal reserve, he just spent several sleepless and chaotic weeks immersed in the complexities of the crisis and had been working closely with his republican pred says oor at treasury to save the financial system. then with the wreckage of our economy still smoldering and unstable, i asked tim to help put it back together. thanks in large part to his steady hand, our economy has been growing again for the past three years. businesses have created nearly 6 million new jobs. the money that we spent to save the financial system has largely been paid back. we put in place rules to prevent

that kind of financial melt down from ever happening again. an auto industry was saved. we made sure taxpayers are not on the hook if the biggest firms fail again. we have taken steps to help underwater homeowners come up for air and open new markets to sell goods overseas and we have begun to reduce our deficit through a balanced mix of spending cuts and reforms to a tax code that at the time, that we both came in, was too skewed in favor of the wealthy and expense of middle class americans. so when the history books are written, tim geithner is going to go down as one of o our finest secretaries of the treasury. [ applause ]

don't embarrass him. [ laughter ] on a personal note, tim has been, a wonderful friend. and a dependable adviser throughout these last fewer years. there's an unofficial saying, no peacocks, no jerks, no whiners. that would be a good saying for all of washington. no peacocks, no jerks, no whiners. few embody that ideal better than tim geithner. that's why when tim was thinking about leaving a couple of years ago, i had to personally get on my knees with carol, to help convince limb it stay on a little bit longer. and i could not be more grateful

to carol and the entire geithner family for allowing him to make the sacrifices that so many of our cabinet members ask of their families. in serving the country. the fact is, while a lot of work remains, especially to rebuild a strong middle class and offer working folks new pathways to rise into the middle class, our economy is better positioned for tomorrow than most of those other countries hit by the financial crisis. the tough decisions tim made and carried out deserve a lot of credit for that. so i understand that tim is ready for a break. obviously we're sad to see him go. but i cannot think of a better person to continue tim's work at treasury than jack lew. this is bitter sweet, not only because tim is leaving. but also because jack's been my chief of staff for the last year. he was my budget director before

that. i trust his judgment. i value his friendship. i know very few people with greater integrity than the man to my left. i don't want to see him go because it is working out really well for me to have limb here in the white house. but my loss will be the nation's gain. jack has a distinks of having worked and succeeded in some of toughest jobs in washington and private sector. as congressional staffer in the 1980s, he helped negotiate the deal between president reagan and tip o'neill to save social security. under president clinton, he presided over three budget surpluses in a row. so for all the talk out thereabout deficit reduction, making sure our books are balanced, this is the guy who did it. three times. he helped oversee one of our nation's finest universities and one of our largest investment banks.

in my administration, he's managed operations for the state department and the budget for the entire executive branch. and over the past year, i've sought jack's advice on almost every decision i've made from economic policy to foreign policy. one reason he has been effective in this town is because he is a low-key guy who has himself surrounded by policy experts rather than cam ares. he can work with members of both parties and forth principle compromises. the son of a polish immigrant, a man of deep and devout faith, jack knows that every number on the page, every dollar we budget, every decision we make has to be an expression of who we wish to be as a nation. our values. the values that say, everybody gets a fair shot at opportunity. and said that we expect all of

us to fulfill our individual obligations as citizens in return. so jack has my complete trust. i know i'm not alone in that, in the words of one former senator having lew on your team is the luxury. putting someone in almost any position and knowing he will do well. i could not agree more. i hope the senate will confirm him as quickly as possible. i want to personally thank both of these men, and their families, especially carol and ruth, for their extraordinary service to our country. with that, i would like to invite them to say a few words, starting with tim. >> mr. president, it's been a privilege to serve you. i'm honored and grateful that you asked me to do this, really. i am. and i'm very proud of what my colleagues in treasury and your economic team was able to help you accomplish these first four years. when you stepped into this

building as president, you were confronted with a world in crisis. the worst crisis in generations. and you made the necessary, the hard, plolitically perilous choices that saved the american people. saved american industry. saved the economy from a failing financial system. and your successful response to the crisis, of course, did not solve all of the nation's challenges. it could not have done so. but the actions you took along with those of a forceful and creative federal reserve have made the country stronger and have put us in a much better position to face the many challenges still ahead of us. and they are many. i have the greatest respect for jack lew. i know him as a man exceptional judgment, calm under pressure, with an extraordinary record of experience over decades spent at the center of american economic policy.

he is committed to defending the safety net for the elderly and poor. he understands what it takes to create the conditions for stronger economic growth and broader economic opportunity. and he understands that to govern responsibly, is to govern with the recognition that we have limited fiscal resources. now like jack, i've spent my professional life in this world of public policy and public service, and as all of you know, our families carry a large share of the burdens we assume in public life. and i feel incredibly fortunate that my wife, carol, and my family, have been willing to allow me to do this. and i thank them for their support and their patience and i understand their occasional impatience. i want to express my admiration and my appreciation for the women and men of the treasury department. those who came to serve you, these years of crisis, and the

civil service of the treasury with whom i first started working in 1988. they are exceptionally talented and honorable public servants. i'm very proud what they have helped you accomplish and i'm confident that my successor will find them the extraordinary asset they are to the nation. and i also hope that americans will look at the challenges we face today and decide as many of you in this room have, that inspite of the divisive state of our political system today, that serving your country is compelling and rewarding work. that was my experience. and i am grateful and will always be grateful to you for having given me the opportunity to serve you as the 75th secretary of the treasury. [ applause ]

>> mr. president, it has been my honor to serve as your chief of staff. it has been a privilege to come to work everyday as part after team building a sound economy in safer world. tim, have you been a friend and colleague for many years. actually, decades. and the american people are better off for your outstanding service. you know, i thought i knew you pretty well, but it was only yesterday that i discovered that we both share a common challenge with penmanship. tim, i join the president and everyone here in wishing you and carol and your whole family well. as a kid growing up in queens, i had dreams of making a

difference in the world. these dreams were nurtured in a home where the gift of american freedom and opportunity were cherished and never taken for granted. and their responsibility to engij in issues of public concern were part of daily life. i will always be grateful to my parents for grounding me and values that remain central to my personal professional life. i grew up professionally in the o office of speaker o'neill. whose compass was always clear, and who demanded unvarnished device on how to reach the desired destination. mr. o'neill cared little about your age or rank and only about whether or not you did the hard work to inform the decisions of the day. and he took a big chance giving a lot of responsibility to a very young man, and for that i will always be thankful. serving at omb first under president clinton and more recently in this administration i worked with one of the finest teams in the government to execute responsibility fiscal policy while advancing economic growth. i'm delighted to see so many of

my friends from omb here today. i work closely with our secretary of state and my good friend hillary clinton to advance the nation's security agenda including national economic policies. as chief of staff i worked with the tremendously talented white house team which manages policy, politics, communications and complex operations everyday with grace, skill and loyalty. if confirmed, i look forward to joining the treasury department whose people are legendary for their skill and knowledge. a team i collaborated with closely over many years and come to respect grately. finally, thank you you to ruth, danny, zohabah and kids for end list tolerance and demanding schedule that tests all family patience. thank you, mr. president, for your trust, confidence and friendship. serving in your administration has allowed me to live out those values my parent instilled in me. and i look forward to continuing the challenges ahead. [ applause ]

>> these are two outstanding public servants. i think the only point that i want it make, leave you with, is the fact that i've never noticed jack's signature. and when this was highlighted yesterday in the press, i considered rescinding my offer to appoint him. jack assures me that he is going to work to make at least one letter legible in order not to debase our currency. should he be confirmed as secretary of the treasury. thank you very much, everybody.

[ applause ] >> let's get some reaction now. our panel is back with us and we are adding kenny to the mix as well. steve, i'm going to go to you. i was struck by the prolonged applause for treasury secretary tim geithner after the president thanked him. mr. lew has some big shoes to fill. mr. geithner obviously very respected on wall street and capitol hill. >> yeah, and again, sue, we will be debating the result of what was done in the early part of the financial crisis until we're both probably too old to debate. but we may be right now. who knows. >> no, we're not. speak for yourself. >> the point being is that i think it is not debatable that the earlier access taken did bring calm and were rather historic at the time and that tim geithner and the president by extension, along with hank paulson and even president george bush before him, deserve

credit for bringing calm to the markets at that moment. i was struck, sue, by one thing. first of all, president obama really emphasizing the budget issues when it came to jack lew. not some of the other wisconsin ones that are thought to be his weakness. the other one was the sense that, it'll be a quiet treasury over there. even if geithner was not a very loud and boisterous one, it'll be a quiet -- >> kenny. >> i was struck by how long and heart felt the applause were. geithner came in at the very apex of the crisis there. and what with a t was like there in january of 2009. >> kenny, you made the point that the floor down here, wall street needs to see him confirmed by the end of january so he can address -- >> absolutely. the talk is that he will be there for the next fight that's coming, right? so i think that the street, people down here, wall street, will give jack lew a pass until such time he is confirmed. but then to see how he really does in these upcoming

negotiations and where it will take us. then the market will decide. >> all right. ty, go ahead. >> if anybody deservees a vacation, it is tim geithner. >> yes. >> thank you for watching. that will do it for "power lunch." "street signs" begins after this break. i had enough of feeling embarrassed about my skin. [ designer ] enough of just covering up my moderate to severe plaque psoriasis. i decided enough is enough. ♪ [ spa lady ] i started enbrel. it's clinically proven to provide clearer skin.

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